# Fractal Wave Channel

## 5.6 Superimposed Equilibrium Fractal Wave Channel

In previous chapter, we have introduced the Fractal Wave Channel. Probably it was not hard in term of how to construct Fractal Wave channels. Now the same idea can be extended using the superimposed patterns. Construction of Superimposed Channel can be done in two steps as before. Firstly, we will draw the base line by connecting point 1 and point 3. Secondly, by projecting the base line in parallel to point 2, we can create the channel over the superimposed pattern. It is typically good idea to aim to draw the channel on the 3 points of larger Equilibrium Fractal Wave. The channel on superimposed pattern has stronger prediction power comparing to the channel created from single EFW. If you are not convinced with this idea, then imagine simple two waves interfering. Two waves can interact together either constructive or destructive. To have the constructive interference, two waves must have the peak or trough overlapping in the same position. When the final points of two equilibrium fractal waves end up in the same position, two equilibrium fractal waves will have the constructive relationship. For example, traders recognized EFW 1 as the trading opportunity will join the force together with traders recognized EFW 2 as the trading opportunity. Hence, the superimposed patterns with two or three EFWs will bring much stronger reaction to the market. In general, more EFWs are superimposed together, its prediction power will grow too. Therefore, superimposed patterns are naturally the best location to place your channel.

Superimposed Channel

Figure 5-30: Superimposed Channel example

two simple wave interference

Figure 5-31: Demonstration of two simple wave interference

Superimposed channel can be used on its own using buy and sell trigger margin rule specified in the previous chapter. Buy and sell trigger level can be identified exactly same as in the single EFW channel. Another excellent usage of superimposed channel is that we can expand the channel into grid lines to get the medium to long-term market prediction. When a superimposed channel is expanded across charts, it provides the predictable grid lines. Traders love the grid lines because they can easily read trend and reversal area. Often you will find that well positioned superimposed channel will provide amazingly accurate prediction for the market movement. Now one might question how to construct the expansion from the superimposed channel. Once again, this is not a rocket science. The expansion construction is simple. Firstly, I much prefer to use the half (50%) of channel width to construct the expansions. One might be able to use 100% of channel width or other width if you wish. In this book, we will assume that we will construct the expansion with 50% of channel width.

As shown in Figure 5-32, expansion lines can be constructed by expanding the channel by the half of channel width in parallel. We can continue this process until we see enough parallel lines filled in your chart for the market prediction. Since superimposed channel provide the fixed location in your chart, there is the reduced subjectivity in constructing the expansion. This is one of the attraction of using superimposed channel over other competing method.

grid lines constructed from one superimposed Channel

Figure 5-32: Demonstration of grid lines constructed from one superimposed Channel

grid lines constructed from two superimposed channels

Figure 5-33: Demonstration of grid lines constructed from two superimposed channels

Harmonic pattern and grid lines constructed from superimposed channel

Figure 5-34: Harmonic pattern and grid lines constructed from superimposed channel

Harmonic pattern and superimposed pattern interaction

Figure 5-35: Example of Harmonic pattern and superimposed pattern interaction

EFW Analytics provide the graphic rich and fully visual trading styles. In default trading strategy, you will be looking at the combined signal from Superimposed pattern + EFW Channel or Superimposed pattern + Superimposed Channel. In addition, you can perform many more trading strategies in a reversal and breakout mode. You can also run two different timeframes in one chart to enforce your trading decision. Sound alert, email and push notification are built inside the indicator.

Below is the link to the EFW Analytics: